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Tuesday, July 18, 2006

Microsoft XBOX Live & Net Neutrality
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I'm consistently amazed with Microsoft's XBOX 360 and XBOX Live Network, and not just because of the games I can play on it but because of everything else I can do.

I was reminded of that tonight when I got on the XBOX Live Marketplace to look for a new "NCAA Football 2007" game demo from EA Sports that I wanted to download and check out before buying the game. When I got to XBOX Live, however, the first thing I was greeted by was a notice about the latest "Artist of the Month." So, I gave that a listen.

Then, my wife came into the room and said something about getting a babysitter sometime soon so we could go see a new movie. But she wasn't sure what she wanted to see, so I pulled up the movie and TV previews page on XBOX Live and downloaded clips from "Superman Returns," XMEN 3," "A Scanner Darkly," and several other movie clips... all in glorious 720p high-def with stunning digital surround sound. (Indeed, downloading all these high-def clips via XBOX encourages me to just wait for home release of the flix because they look much better on my home projector than they do at the theater!)

A short while after that, my kids came into the room so I decided to pull up something for them. I downloaded some clips from Pixar's new movie "Cars" and then also downloaded a free version of the arcade classic "Frogger" for my daughter to try out. Here was a game that I pumped countless quarters into as a kid back in 1981, and now my daughter was sitting with me playing it for free 25 years later. On the sofa in our basement. With a wireless controller. On an 8-foot wide projection screen. My how times change!

But wait, as they say, that's not all. I had snapped some great new shots of the kids with our digital camera a few days prior and I wanted to show them to my wife. Never fear, there's no need to leave the living room to do this. Once you have purchased a wireless networking adapter for your XBOX, you can tap into your home's wi-fi network and also use the XBOX as a media bridge with other computing devices. By downloading a small program onto my laptop from the XBOX website, I am able to wirelessly access all my saved pictures and music from rooms away using my XBOX. Thus, down in my basement, I pulled up a slideshow of all those new photos of the kids to show my wife. And while I was doing that, I threw on a little background music by wirelessly accessing some of the playlists that I had build in the Windows Media Center, which, again, was located up on my laptop two floors above me. Pretty darn cool.

After doing this for roughly an hour or so, I realized that I wasn't really doing much gaming on my gaming console! Indeed, with each passing week that I own the XBOX, I seem to be tapping its other media functions more than its gaming capabilities. And once they finally get around to offering a HD-DVD drive for the system this winter, I'll be using my XBOX as a movie player too. I can't wait for that since the video and audio quality is significantly better than traditional DVD. (Of course, I'll need a PlayStation 3 if I want to get Blue-Ray capabilities. Ugh. Damn format wars!)

OK, so I promised to mention Net neutrality to make this essay worthy of inclusion on a blog about public policy. While I obviously love all the functionality that the XBOX platform offers, there are times when I'm using it that I think it could be much better. Specifically, downloading short movie clips and game demos can take quite a long time. My Verizon "FIOS" broadband connection speed is 5 mbps down and 2 mbps up, which is plenty fast for most of my home networking applications and websurfing activities, but not nearly fast enough for aggressive XBOX Live activities. Indeed, it took me around 40 minutes to download that "NCAA Football 2007" demo from EA Sports. I think it was around 1.1 gig, so that's a pretty big file, but it sure would be nice to get it quicker than that. And some of the bigger movie clips took some time too. Luckily, XBOX allows users to just order up a bunch of downloads at once and then go ahead and do other things while you're waiting.

Nonetheless, I can't help but think that there's a lot more potential in this little box if Microsoft could somehow improve network speeds / traffic management. One answer, of course, is to just ask all its end users to boost their broadband connection speeds. Problem is, not every gamer is lucky enough to live in a neighborhood where 30-50 mbps of blazing broadband potential can be tapped. (That's what Verizon FIOS is now serving up in some communities). Moreover, blazing broadband connections like that don't come cheap. Can most consumers afford to pay triple or quadruple what they do now for faster connections? Probably not.

What can be done about this? Well, Microsoft might consider striking a deal with major backbone providers or other traffic managers such as Akamai to better manage all those bits and help customers tap network content in a quicker, more reliable fashion. Again, I'm sitting around as patiently as possible today waiting for downloads of short movie clips and game demos. But, if it was feasible, I would be willing to download entire movies and games today. Why do I still need to go down to a retail store to buy or new movie or game, or order a physical copy from Amazon or Netflix? This is silly. I should be able to go to the XBOX Live Marketplace, call up the movie or game I want, and just download it directly onto my system.

Yes, I know there are some sticky copyright issues here that I'm ignoring, but let's pretend for a moment that we can get those worked out. (Specifically, can I burn a copy of the movie or game to disc once I've downloaded it? And will the DRM allow for space-shifting around the house or to other media devices?) If we can work out the legal issues, can we work out the economics, too? Obviously all this downloading of movies and games over the XBOX Live network would place an enormous strain on broadband pipes. Already today, even though online gaming is still in a very primitive stage with very few homes taking advantage of it, it eats up a lot of network capacity. Imagine how much more it would eat up in the future if my dream comes to pass, especially as millions of new users come online. Again, how can we make sure that this future comes about but that it doesn't overburden the system?

I would like to see experimentation with a variety of hybrid solutions. On one end of the spectrum would be strict metering of broadband pipes. Consumers pay according to how much they use. Again, that could mean huge cost increases for some users. A better alternative might be metering of the pipe after a certain level of usage has been hit. Thus, consumers would have a flat-rate charge up to a certain point but then pay usage-based rates if they are aggressive broadband users like me. At the complete opposite end of the spectrum would be the unworkable solution of asking Microsoft to pick up the entire tab for all its users XBOX Live activities. Not gunna happen. But what about a hybrid solution that entailed Microsoft seeking out superior traffic management techniques and picking up part of the tab for faster and more reliable connections? True, this would mean MS would have to shell out some more cash upfront than they do now, but think of the long-run effects. If consumers like me knew that they could get high-res movie and game downloads on the XBOX Live Marketplace, we'd likely consume even more of those services. Indeed, I would start substituting MS Live for Amazon, Netflix and many other sites and services I currently use. Think about the revenue potential here, and we haven't even talked about increased online advertising possibilities or new products that MS could sell. (Think other computer software in particular).

Of course, if could be that broadband providers force Microsoft's hand here as the traffic burden grows. Few other consumers in my neighborhood consume anywhere near the amount of bandwidth I do and yet they are all still paying the exact same amount I do for 5mbps worth of broadband service. Does that make any sense? Shouldn't Verizon be able to craft a pricing plan that requires certain intense bandwidth users or application providers to pay more for network access while light users get a price reduction? Why doesn't Verizon or other broadband providers go to MS and see if they can craft a deal that would ensure newer, faster services get delivered to those who want them while also ensuring that all parties involved help pay for a share of the increased burden they are placing on the network?

This gets to my ultimate question: Will all this marketplace experimentation be legal in a world of Net neutrality regulation? It doesn't sound like it would be. NN proponents seem obsessed with the idea that all traffic must be treated equally. Some would go so far as to ban forms of price discrimination like this that might benefit all involved.

It's all quite sad, in my opinion, because here I sit in my basement typing up this entire blog entry while I'm waiting for another game demo to download. Certainly there has to be a better way. And I would hope that Microsoft would understand that, at some point in the near future, it might be in their best interest to strike the sort of deal I have outlined here in order to improve the user experience and expand revenue potential at the same time.

But we'll never know if Net neutrality mandates get on the books because that sort of experimentation might be prohibited by force of law.

posted by Adam Thierer @ 5:23 AM | Broadband , Innovation , Internet , Mass Media , Net Neutrality

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